GUIDE : What are the steps to choose an ERP for a professional services?

Despite the desire of a service company to equip itself with an ERP, three fears regularly disrupt the purchasing decision: acceptance by the teams, fear of change and fear of a complex deployment. Not convinced? Here are 3 main reasons to implement an ERP tailored to your service business.

A detailed analysis of your needs and of what the ERP systems you are comparing will allow you to better align your specific needs with the functionalities offered by the tools, and will ensure that you overcome these three difficulties inherent to such a change.

By following this guide, you will be able to accurately assess each step of your processes and ensure that you identify the best ERP for your service company. Let us guide you step by step.

 

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SUMMARY

Quick Access: The Benefits and Steps

Summary

The advantages of an ERP for professional services companies

All teams save time in their work when an ERP is implemented:

– Employees find all their actions in the same tool. Depending on their rights, they have access to their projects, their time tracking, their schedule, their expense and absence management. Beyond the time saved by finding everything on a single platform, the employee experience is also simplified

- Support teams, finance teams and management perform their monitoring, validation and control tasks on a single platform. Notifications and tasks are centralized, which makes it possible to move forward more quickly

A service company that uses an ERP adapted to its business increases visibility on its performance tenfold.

Accurate knowledge of project margins. Anticipation of projects that are deviating from their budgets. Visibility into utilization rate of employees (time spent on billable projects).

The numerous indicators on the past and projected performance of the company allow to quickly improve the situation by knowing where the improvements are, and gaining anticipation in the decisions.

ERP in a service company connects all the teams, but also the stakeholders of the projects the company is working on. ERP is a central solution on which all stakeholders connect and share information. This connection brings efficiency in the work and better quality to projects.

Benefits

Step 1

Narrowing the field of possibilities

When you start your search for an ERP, make sure that you identify the solutions that are truly dedicated to your business. If you are a consulting company, for example, carry out a specific search for an ERP dedicated to consulting companies. There are indeed ERPs dedicated to all types of business and it is sometimes difficult to target those that are best suited.

For this initial analysis, a thorough search on the internet is sufficient. There are software comparators, and especially Google, which allows you to identify the solutions that are most aligned with your needs.

Generally, the ideal search should allow the analysis to be restricted to a number of 3 to 5 solutions. It's not necessarily very productive to look beyond this number, as chances are that the initial analysis will allow you to narrow down the number.

Star

Step 2

Prepare your specifications to compare ERPs

To make a foolproof comparison and make the best choice, you can create a benchmark document to review all the topics that matter to your company. To make your work easier, we have listed the different topics to review, and the questions you can ask.

1. The main points to study on the functionalities

Scheduling management and resource planning Teams

A good ERP should give you as much visibility into the past as it does into the forecast. Resource and schedule management is the difference between a basic ERP and an end-to-end solution that integrates the key process of the resource planning and planning, which is at the heart of a service company.

It is necessary to check whether the ERP allows:

  • assign employees to projects and deals
  • to calculate load indicators such as staff activity rate, TACI, ...
  • facilitate the search for profiles based on skills and other criteria (experience, employee preferences, etc.)
  • view schedules, and connect to employee calendars
  • Calculate production, turnover and projected project costs using the load forecast
  • flagging employees who are at risk of going into inter-contract

Questions you can ask on this topic:

  • Is skills management integrated?
  • Can employee preferences be taken into account?
  • What are the indicators that make it possible to better manage the load?
  • Can we easily assign employees to projects and tasks?
  • How to Script the resource planning on projects that have not started?
Staffing

Project management and margin calculation

The ERP must provide your company with complete visibility on the performance of the activity.

The points to check are the following:

  • Monitoring of all costs (staff, subcontracting, purchasing, fees)
  • Calculation of turnover adapted to the type of invoicing (flat rate, advertising agency, subscription, etc.)
  • Calculation of margins at the date and end of the project
  • Analysis of the variances between the production and invoicing of a project
  • Analysis of the variance in time spent on the project, on project tasks, per person

Questions you can ask on this topic:

  • How is the recognition of turnover managed?
  • How are project margins calculated?
  • How is non-invoiced production recovered?
  • How are subcontracting costs raised?
Project Management

Global and activity-based reporting

An ERP for a service company must allow you to benefit from all the indicators necessary to improve the company's performance and facilitate decision-making.

Make sure the following metrics are part of the reporting:

  • utilization rate, staff activity rate, TACI
  • Production in days and value
  • Revenue and margins by project, by department, consolidated
  • Average Day Rates
  • Income statements
  • Cost analysis and invoicing of subcontracting
  • Analysis of time spent variances by type of activity

You can ask the following questions:

  • How is the time spent on billable projects calculated compared to the time available?
  • How do you value production?
  • How does the solution differentiate between valued production and turnover?
  • What reports do you make available to check if the pricing is good?
Proactive Reporting

Project invoicing

Centralizing invoicing in the same tool as activity monitoring makes it possible to automate invoicing, make data more reliable, and facilitate the analysis of discrepancies between production and invoicing.

Important points to see about invoicing:

  • Ability to invoice projects on a fixed-price basis, on a time-and-cost basis, on a subscription basis, etc.
  • Mass sending of invoices by email
  • Customization of invoice templates
  • Follow-up of unpaid invoices and automatic reminders
  • Sending invoice data to accounting solutions

Questions you can ask:

  • How is invoicing automated with the available data?
  • How are unpaid invoices handled?
  • How can I connect an email address to the ERP for sending invoices?
  • How are the discrepancies between the planned, the revenue and the invoiced analyzed?
  • How is billing data extracted and transferable?
Billing

Other useful features

An ERP for professional services companies must centralize a maximum of functionalities to automate the tasks and to exploit the data as well as possible. It is necessary to check the capacities to manage the following functionalities:

  • Expense management and chargeback of billable charges
  • Absence management with connection to HRIS software
  • General Procurement Management
  • Management of subcontractor invoicing

Questions to ask:

  • Are the costs managed, via a mobile app with data recognition?
  • How is the re-invoicing of expenses managed?
  • How do you manage the different types of absences?
  • Can we manage supplier purchases and invoicing?
Fresh

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2. Major points to study on deployment

The success behind the implementation of an ERP

The success behind implementing an ERP for a service company lies in the ability of the deployment teams to bring about change. Knowledge of the use cases and full mastery of the solution is a key success factor among others.

Key points to know:

  • Quality of support
  • Cost of support
  • Historical data import management and migration
  • Management of user training, administrators, etc.
  • Customization and specific developments

Here are the questions to ask about ERP deployment and integration:

  • How does the deployment of the solution work?
  • Are onboarding teams internal or external to your teams?
  • What level of support, what is the time spent by the teams of the ERP publisher, and by the teams of the customers?
  • How does the data takeover work?
  • How do I set up connectors with other software?
  • What training is done before the go-live?
Deployment

3. Generic points about the company

Its policy in terms of security

Finally, choosing an ERP for a professional services company also means choosing a vendor that must demonstrate its ability to maintain the ERP over time and provide the technologies necessary to continue to make it attractive. The ERP vendor must also prove its resilience, its compliance with personal data processing standards, and its actions in terms of cybersecurity.

Points to look out for:

  • Hosting and Localization of Customer Data
  • Rights and access management
  • GDPR policy and respect for personal data
  • Action to ensure security and prevent intrusion attempts

Questions to ask:

  • Where are your servers located?
  • What data is transferred outside of your hosting sites and to which countries?
  • How do you ensure compliance with the GDPR?
  • What protection measures are in place: pentests, data encryption, etc. to strengthen security?
Accommodation

Step 3

Get started with demos and fill out your file

With all these points that you can also complete, you can create a specification, as well as a comparison file.

List all the points that you think are important to review during the exchanges with the suppliers. In the column, list the different ERP vendors you plan to analyze.

Complete the file as you exchange, leaving comments to remember the answers given on the different subjects.

You can apply a scale with a weighting to better rank the different ERP solution providers.

At the end of this work, you should be able to clearly see which solution is the best and has the best alignment with your needs.

Choice of ERP

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